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Daily Focus
23 March 2009

Paladin Energy: An eventful week

Paladin (PDN) reported two incidents at its Kayelekera project in Malawi last week. On 16 March PDN reported a flash vapour fire which resulted in the death of 1 worker and two injured suffering serious burns. Macquarie Research Equities (MRE 23/3) understand the fire was localised to the packaging plant and no major damage to equipment occurred. On 20 March PDN reported a protest by 250 of the 1,600 workers on site during the current construction phase. MRE understand the protest is not related to the accident earlier in the week and revolves around tensions in the winding down of the work force as PDN transitions from a construction to production phase. PDN’s guidance is for plant commissioning at Kayelekera late in the March quarter. Latest indications are that front end commissioning has commenced and the plant is ~94% complete. MRE believe PDN continues to build a strong strategic position in the uranium industry as the only uranium producer with 100% of production uncontracted from 2013. MRE also believe the short-term value driver, outside of a control event, is an update on a potentially more capital efficient and larger expansion at the non-resource constrained Langer Heinrich site.